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ChinaBio® Group is a consulting and advisory firm helping life science companies and investors achieve success in China. ChinaBio works with U.S., European and APAC companies and investors seeking partnerships, acquisitions, novel technologies and funding in China.

AstraZeneca Uses Local Partners to Expand Impact of China R&D

Editor’s Note: Steve Yang, PhD, of AstraZeneca, where he is Vice-President and Head of R&D for Asia, was recently interviewed by EBD Group, our Partner in the ChinaBio® Partnering Forum. His remarks on AstraZeneca's China R&D operations and the company's China partnering strategies were printed in EBD’s online publication partneringNews (see site). We reprint the interview in full below.

partneringNEWS (pN): AstraZeneca has a long history in China, beginning with its first joint venture in 1993. How have the Chinese business and research environments changed since then and where are they heading?

Steve Yang: I am glad you recognized our long history in China which we’re very proud of. Our decision to set up here in 1993 makes us one of the most established multinational pharmaceutical companies in the country and this “early mover” status has allowed us to work and partner with a wide range of local healthcare providers and government ministries for almost twenty years.

In terms of changes, certainly more multinational companies like AstraZeneca are now coming to China and the Asia region. Our point of view from an R&D perspective is that we need to have a significant physical presence here to be closer to the patients we serve and the scientists and medical professionals we collaborate with. Also, being here on the ground allows us to access the great local talent. Chinese culture has a strong history of innovation and the people we’ve tapped into locally help support and drive our innovative R&D efforts. We access the R&D innovation and capabilities available externally, which is a great way to augment our internal capability. We are already working with many talented partners here in China and are always looking for potential new collaborations.

pN: At ChinaBio you are discussing capturing innovation. Where do you see innovative opportunities in China for AstraZeneca?

Steve Yang: We see those opportunities coming from three fronts, two of which I mentioned earlier: the world-class talent pools we can tap into, and being physically close enough to external partners to meaningfully collaborate with them. The third component is our focus on the specific diseases that are important to patients in China and the rest of Asia.

Let me address each of those in turn.

We believe that China’s innovation heritage is set to continue and that it and Asia as a whole will play an increasingly important role in innovation globally, not just in Asia. It is important to recognize that this is already happening as both China and Asia are important to AstraZeneca’s current drug development programs and overall global R&D strategy.

As far as collaborations go, we’ve put in place a strong, collaborative network with leading academic institutions not only in China but also in Japan, Korea and Singapore, across which we also collaborate with local biotech companies to expedite the availability of diagnostic tools that will benefit local patients.

When it come to disease focus we aim to develop the most meaningful, innovative products and therapies to meet the unmet medical needs of Asian people in particular, such as stomach and liver cancer which are more prevalent in Asians. Some of the data behind these conditions highlight huge disease burdens: more than half of newly diagnosed stomach cancers arise from East Asia and over 75% of world’s liver cancer patients are in this part of the world.

pN: How do you see your presence in China five years from now?

Steve Yang: Our investments in China and more broadly, in Asia, are set to continue. I can’t stress this enough, this is clearly based on our belief that the talent in this part of the world can drive innovation for us and also that it is in Asia and the so-called emerging markets where the industry will experience significant growth. Using China as a specific example, the growth of its pharmaceutical market is on a scale we don’t see anywhere else. In 2004, it was worth USD 10 billion. Within five years, it tripled. China is now the fifth largest market worldwide, worth USD 30 billion with growth rates projected to exceed 20% annually. The fact that it is estimated to be a USD 80 billion market by 2014 and will be ranked only behind the United States and Japan is incredible.

For us at AstraZeneca, we expect to continue our strong performance in China with double-digit growth rates in the years ahead. We more than doubled our sales here between 2004 and 2009, and in 2010 revenue grew to over USD 1 billion, a 28% increase (at constant exchange rates).

pN: What is your partnering strategy for China? (What types of organizations interest you and how may they best approach you?)

Steve Yang: A central plank of our global R&D strategy—not just in China and Asia—is to collaborate with highly talented, best-in-class, external academic and medical institutions that have complementary in-depth expertise. We fully recognize that adopting a more collaborative approach to R&D helps us achieve more than we ever could alone and as such, we always aim to collaborate based on a “win-win” principle.

More broadly and irrespective of location, we’re forming creative, unexpected partnerships with other key players in the healthcare arena. Around the world, we have the opportunity to go beyond the traditional pharma-biotech collaborations and bring academia, governments, NGOs, patient advocacy groups, venture capitalists, and other thought leaders to the table. By drawing on the unique strengths of different organizations and individuals, we can deliver the greatest impact while consistently pushing the boundaries of medical science for the benefit of patients.

Anyone interested in reaching our network of Strategic Partnering and Business Development people should look up Shaun Grady, based in our Kingdom Street office in London, UK and Chris Yochim, who’s in our Wilmington site in the US. Shaun and Chris are seasoned leaders and should be anyone’s “first port of call.” Both of them would be happy to put potential partners in touch with the right teams.

pN: In 2007 AstraZeneca opened the Innovation Center China (ICC) in Shanghai, focused on translational medicine. Tell me about its work now. How is it contributing to the development of indigenous products? (What type of work is underway, how advanced is it, have any products emerged?)

Steve Yang: The Innovation Center China (ICC) is one of AstraZeneca’s key global R&D centers and we’re very proud of its accomplishments to date. You’re absolutely right when you mention translational science being our focus and quite specifically our efforts in developing knowledge about Chinese and Asian patients’ specific biomarkers and genetics, all of which, ultimately, will help develop the most meaningful products and therapies for Asian people.

At its simplest, we are aiming to answer the question “Why, on occasion and seemingly inexplicably, are there diseases and conditions that are more prevalent in Asians?”. For some of these diseases we have a pretty good idea as to why this is the case but for others, we simply don’t know. To address this we have three main approaches at the ICC: first, we want to make sure patients in this part of the world can benefit most from our existing products; second, we want to make sure that any new products we’re developing will take Asia’s unmet medical needs into consideration; third, we aim to discover and develop new drugs specifically designed for Asian patients and diseases that are more prevalent in Asia.

So far the outcomes have been promising, with our rapidly expanding team of 80 highly talented scientists and staff seeing their scientific rigor, hard work and team spirit result in three new compounds going into clinical trials which address gastric cancer and liver cancer. Those candidates are progressing well through the early, major stages of their clinical trial programs (Phases I and II). In the future, we’re looking to maybe expand ICC’s scope to include other therapy areas and have already started work in the area of respiratory diseases.

pN: What other strategies is AstraZeneca using to encourage and access Chinese innovation?

Steve Yang: Collaborations with the best external institutions, recruiting and retaining the best talent, and working on a truly international basis internally are the pillars of our approach. That applies equally to China as it does for other parts of the world where we have R&D operations with innovation always being at the core of whatever we do.

pN: How is AstraZeneca approaching the differing growth opportunities of the China and global pharma markets?

Steve Yang: As I mentioned earlier, the growth opportunities in China are unlike any other country at the moment. At the same time, the global growth rate for our industry is slowing down, due to well documented changes in the way that our industry as a whole and healthcare providers need to operate. From an R&D point of view we’ve certainly identified Asia and China as being important parts of our global network, alongside other emerging markets such as Brazil, India and Russia.

In terms of overall, worldwide growth we believe we’re well positioned for success and to make a real difference as our portfolio and R&D focus are both well matched to meet medical needs across therapy areas such as cardiovascular, gastrointestinal, oncology, infection, neuroscience, respiratory and inflammation. These cover some of the world’s most serious illnesses and represent major worldwide disease burdens such as Alzheimer’s disease, cancer, chronic obstructive pulmonary disease (COPD) and Type 2 diabetes.

From an Asian and China perspective, in addition to those lung, gastric and liver diseases which we’ve already identified as being more prevalent in this region, there’s also a marked increase in diseases that are typically viewed as being endemic in the West such as diabetes. The New England Journal of Medicine expects that the Asia Pacific region will be home to more than 60% of the 380 million diabetes cases globally by 2025 with India and China having the highest number of diabetes cases worldwide. These are truly staggering figures and even now more than 92 million adults in China have diabetes, making it the diabetes capital of the world. India follows second, with an estimated 50 million cases—up from 28 million in 2007. Again, our portfolio and research focus are well aligned to address this and other significant burdens affecting Asian people.

pN: What are your goals for the ChinaBio Partnering Forum?

Steve Yang: We’re always on the lookout for best-in-class partners to collaborate with, and the ChinaBio Partnering Forum starting May 11 represents some great opportunities to meet with potential future partners as well as existing colleagues and friends. We’ve been partnering for more than 30 years now, working not only with people in the realm of R&D but across a whole range of other businesses in addition to academia, governments, NGOs, patient groups and venture capitalists. Every year we enter into hundreds of collaborations worldwide and in the last three years alone, we’ve sealed more than 60 significant deals which were individually designed to meet the needs of our partners and ourselves. So, making even initial contact with people who in the long run turn out to be the right partners at the right time for the right deal would be a definite success.